Classical biochemistry is founded on several assumptions valid in dilute aqueous solutions that are often extended without question to the interior milieu of intact cells. In the first section of this chapter, we present these assumptions and briefly examine the ways in which the cell interior may depart from the conditions of an ideal solution. In the second section, we summarize experimental evidence regarding the physical properties of the cell cytoplasm and their effect on the diffusion and binding of macromolecules and vesicles. While many details remain to be worked out, it is clear that the aqueous phase of the cytoplasm is crowded rather than dilute, and that the diffusion and partitioning of macromolecules and vesicles in cytoplasm is highly restricted by steric hindrance as well as by unexpected binding interactions. Furthermore, the enzymes of several metabolic pathways are now known to be organized into structural and functional units with specific localizations in the solid phase, and as much as half the cellular protein content may also be in the solid phase.